Illicit Trade in India

Illicit Trade in India

News: Recently, FICCI CASCADE reported on illicit markets associated with financial flows and revealed their linkages with organized crime and terrorism.

What is Illicit trade?
• Illicit trade refers to the illegal exchange of goods and/or services, often in violation of national or international laws. It comprises trade of manufacturing and export of counterfeit goods.
• Smuggling and counterfeiting are the most common types of illicit trade.
• Counterfeiting is a practice of manufacturing, importing, exporting, distributing, selling or otherwise dealing in goods, often of inferior quality, under a trademark that is identical to a registered trademark, without the approval of the registered trademark owner.
• Smuggling: It is a criminal offense which includes the secret movement of goods across national borders to avoid customs duties or import or export restrictions.
• Money laundering: It is the process of illegally concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source.

Key Findings of Report:
• There is an intricate nexus between the illegal economy, terror and organized crime. The report highlights the role played by criminal networks in a number of illicit activities, including drug and human trafficking, smuggling of cigarettes, alcohol and illegal trade of wildlife products.
• Illicit financial flows drain resources from development not only when they leave a country (outflows), but also when they enter a country (inflows).
• Illicit trade generates significant revenue, enabling financial backing for terrorist organizations. The porous borders facilitate the movement of illicit goods and funds. The direct link of these activities with terrorists is a cause of concern.
• Drug trafficking, arms smuggling, counterfeit goods, and wildlife trade are lucrative enterprises that fund criminal networks. The profits generated often support organized crime syndicates, fostering corruption and undermining security.

Challenges associated:
• Loss of revenue for both Central and State governments.
• As perpetrators of illicit trade are becoming increasingly sophisticated, well-connected and adequately funded, the activities of counterfeiting and smuggling are presenting a bigger challenge for enforcement authorities and governments globally.
• Financial gains are further deployed for illegal activities such as drug trafficking and other organized crimes.
• Illicit trade cuts prices of locally manufactured goods. Small vendors, businesses stand to lose.

Which agencies in India check Illicit trade?
• Narcotics Control Bureau (NCB), Enforcement Directorate, Central Bureau of Investigation and NIA.

Way Forward
• Combat Terror financing
• Consumer awareness is needed to highlight dangers of buying and using such goods
• Stringent anti-piracy regulations are a must to enforce IP rights and empower various enforcement agencies in India.